It’s no secret that the tech sector has seen significant growth in the last few years. With that expansion, there has been an influx of opportunities for short-term contract workers to meet the demands of the tech sector. This changing workforce has developed into what’s known as the Gig Economy, where a growing number of contract workers or consultants offer their services for the duration of short “gigs” with a given company. In fact, according to Intuit the Gig Economy comprises 34% of the entire U.S. workforce and is expected to grow to 43% by the year 2020.

Alongside the rapid adoption of IoT devices, this shifting employment style has created demand for tech and industry consultants. However, the increasing number of professionals available to meet these needs can cause the word “consultant” to lose some of its specificity. But does this mean that hiring a consultant is over-hyped?

The answer is no; hiring a consultant is definitely not over-hyped.

In fact, it can be a strategic maneuver for your company regardless of industry. Consultants bring decades of beneficial experience, relationships, connections, resources, and skills that you can effectively leverage to leapfrog ahead of your competition.

The key to establishing a successful relationship with a consultant lies in selecting the right person to work with. Here’s what to look for to find a great consultant for your company:

A Proven Track Record in the Right Industry

First, choose someone with a proven track record in your target industry or market. Someone who consistently builds products or relationships in your chosen field can shave years off your sales cycle. This is due to the breadth of tools that an industry-specific consultant will bring to the table.

The right industry consultant will have previously-established relationships that would otherwise take years to develop. This allows you to borrow the credibility that this individual has built over years or decades. As a result, you will gain much quicker access to proven decision makers to close sales quickly for your products.

Early on after founding I.D. Systems, I hired a consultant with strong connections at Avis Rental Car. Since this consultant was willing to vouch for our technology, we were able to easily borrow his professional ties and company rapport to set a meeting with the president of Avis. The consultant was a perfect fit for IDSY at the time, because we were trying to enter the rental car industry with our advanced RFID technology.

RFID tech generally wasn’t perceived to be as advanced as our application was during this time, so our consultant’s confidence and leverage were crucial factors that got us in the door with an industry leader who otherwise might not have seen the game-changing implications that our technology provided for Avis. As a direct result of our consultant’s work and connections, we established a meeting that quickly led to our first demo and our first purchase in the rental car industry. This saved a lot of time and resources that might have otherwise been spent attempting to build the necessary rapport and relationships. It guaranteed our message would be heard by the right person.

Based on that first success, I hired an aviation consultant—an important maneuver, because like rental car, the aviation industry is typically dominated by relatively few players. There was no room for error when trying to establish connections in this space. Our consultant mitigated this issue by directing us to the correct people at trade shows, and pointing us to the industry publications that our clients would engage with for advertising opportunities.

Perhaps most importantly, this consultant spoke the aviation industry’s language. Almost every industry has a different language for their day-to-day operations. It is crucial to ensure that your product can be translated into the right terms, because your prospective client’s perceptions of your value hinges upon whether they can imagine it as a solution for their own needs. If you’re not communicating your own value in familiar terms, you might easily miss a sale with a large buyer. Our consultant immediately proved their worth by helping us avoid these issues so that we could facilitate game-changing deals in the field of aviation.

Previous Successes With Your Company’s Stage of Development

There’s no need to reinvent the wheel during your company’s projects. When you tap into a consultant’s wide range of experience, they can help you determine what is proven to have worked—or sometimes more importantly, what didn’t work. This is especially important when your competitors have VC resources or advisory at their disposal. You need an industry representative with experience in your company’s current phase. When trying to beat competitors to a patent or to market, losing time and resources simply isn’t an option. Consultants can help you be more agile than your competition.

If you’re in the product ideation and planning phase, find someone who has been successful with this type of project. If you’re bringing an IoT product to market, find a consultant who has a great track record of building effective go-to-market strategies.

A consultant with years of experience in your target industry and your company’s development stage will help you make important decisions about your product’s specifications. With relevant experience comes the foresight to anticipate problems and prevent them. Consultants with experience directing your type of project can advise you on what your product should or should not do. They can also predict what functions you can/should add later to give your company the best opportunity to dominate the market or establish a strong niche. He or she can guide you to which functions will cost less to develop but could bring a very high return for the end user, and vice versa.

Project-specific consultants can also help you predict what your projected price point will mean for your product’s reception in the industry. They can advise you on what companies will be willing to pay, as well as interpret previous benchmarks and expectations that might hinder or help you.

This is critical as the IoT space grows, because the increasing number of competitors requires you to make smarter decisions about how you spend your time and resources. You want to be certain that you’re investing in specifications that are at the right price point and will deliver sales growth in the future.

The Resources to Take Advantage of Relevant Marketing Opportunities

When you find a consultant who has a great track record in both your target industry and your company’s development stage, chances are good that their advice and connections will help you market your product. The relationships that a consultant has built over time in your industry will have created a network of professionals that you can reach almost instantly.

These connections might consist of individuals who can send you exclusive invitations to networking opportunities with major players, and access to critical industry data points. They may also consist of editors from trade publications, or industry thought leaders.

Due to the network-building capabilities you gain from your chosen consultant, your company may have earlier access to relevant industry news. This will help you appear at the events or in the media outlets that will get the word out about your solution, and to make sure it finds the right audience. It also opens the door for your marketing team to strategize properly and make the most of these options.

ROI is Seen Through Impact

As someone who’s been on both sides of the consulting equation, I’ve truly seen how impactful a consultant’s influence is. While at IDSY, we achieved results with consultants that would have been nearly impossible to accomplish so rapidly without those individuals’ connections and experience. Now that I consult with companies and provide the same type of industry and company expertise, I’m able to see the trajectory of my clients’ sales cycles grow rapidly due to these same types of connections—but from the perspective of a consultant instead.

For example, one company that I consult with is an industry leader in the lithium battery field. By leveraging my connections with decision-makers at each of the F100 companies who use their technology in the market, I’ve been able to connect them with the right buyers—which translates directly into shorter and more successful sales cycles.

Other clients of mine have needed help positioning their product in the market or understanding how to price their products. Rather than wasting valuable time and energy guessing at what pricing options were best, I was able to advise them to plan for sustainable and scalable growth based on proven pricing models, while pointing them toward the features that would be most appealing to buyers in the industry.

Effective leadership sometimes requires you to recognize when to hand the reins for specific tasks to people who can best guide you and your team through your company’s phases of growth. By leveraging the right consultant’s long-standing relationships and industry knowledge, you can adjust your product and put your company ahead of the curve.

With all of these benefits, it’s easy to see that hiring consultants isn’t over-hyped. The trick is simply to find the consultant whose expertise and resources match your company’s goals. The ROI is there and shows that the Gig Economy is growing a resource that shouldn’t be overlooked.

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

]]>http://kenehrman.com/2018/02/are-consultants-over-hyped-when-to-hire-what-to-look-for/feed/0Data is the New Oil: Drill Into Data and Achieve Success With Analyticshttp://kenehrman.com/2018/02/data-is-the-new-oil-drill-into-data-and-achieve-success-with-analytics/
http://kenehrman.com/2018/02/data-is-the-new-oil-drill-into-data-and-achieve-success-with-analytics/#respondThu, 01 Feb 2018 08:33:59 +0000http://kenehrman.com/?p=1047

In the digital age, data is the new oil. It is a source of wealth for any business, but this is especially true if it can be utilized properly through analytics.

With more Internet of Things (IoT) devices in use than ever before, there’s never been a better time to look at your data, assess your performance, then make transformational changes to your business and your bottom line. Here’s how to drill into that data and achieve success with IoT in your industry:

Data Alone Isn’t Enough

If Data is the new oil, then analytics is the refining process that produces your valuable end results: relevant information and actionable plans for improvement.

Most IoT devices collect real-time data. This means that IoT devices will give you raw information about whether a door is open or closed, if a forklift is idle or in use, where an asset is located at a given time, and more. In the raw, this data can only be used for real-time adjustments. To truly put this information to use, you need to take a deep breath and dive into analytics to interpret that data and roll out the best solutions.

Through the process of data mining—the practice of examining large amounts of information to generate new information—you can draw conclusions about your business practices in relation to various factors that impact your company. Once you do, you can make critical adjustments that will help your business pull far ahead of your competition.

There are many reasons why analytics are essential for your company, but some of the most important are that it will allow you to:

Understand past trends to predict future results

Identify and quantify the ROI for any solution that you employ

Determine and apply industry benchmarks for increased performance

In these ways, analytics will prepare your business for better operability, prove which solutions should be implemented across your enterprise, and tell you how well you’re succeeding in comparison to other industry leaders.

Understanding Past Trends to Predict Future Results

If we were to enter a year with a down economy, how would your business be affected?

Mining your data can answer that question. With analytics, you can collect information over years or even decades, then look at that data to identify what steps you can take to best prepare yourself and your company for any challenge.

The first step is to correlate data trends with variables that are important to the scenarios you’re trying to predict. Looking at the state of the economy compared with information about your company’s best years of growth will help you isolate specific events that may have impacted those results.

For example, you can look at what your asset utilization rates were during previous years of recession to improve resource deployment in the future, or even to mirror past successes. If the economy grows aggressively, instead—which seems likely—you can then look at how high your utilization rates grew during other periods of rapid expansion to strategize properly for growth.

By observing these additional impacts in relation to your data, you can determine asset utilization rates, safety rates, maintenance rates, etc. to more accurately predict what could happen over the course of the fiscal year and how you can best prepare for it.

Identify and Quantify the ROI for Any Solution

What can you see within this data?

Once you look at the trends you’ve established over time, you can identify the macro trends according to specific variables within your enterprise—such as region, customer type, time frame, or employee position. Next, identify regions or segments that are functioning better and isolate top performers to establish your Key Performance Indicators (KPIs). KPIs are used to assess whether you’re on target with specific organizational goals. Then, use analytics to figure out why they’re top performers so that you can prove which solutions have the best ROI.

Let’s consider a scenario where you have 12 employees in the shipping department of Distribution Center 1. Of these employees, a few are operating with around 99% efficiency, whereas others are moving at around 50% efficiency. You have a similar setup with 10 employees in shipping at another facility, Distribution Center 2, who all work at around 90-99% efficiency with a similar number of orders. This confirms that any of your shipping centers can be at least as successful as Distribution Center 2. Set your KPIs accordingly with the high success rate of Distribution Center 2, then use analytics to compare time frames, customer impacts, regional variables, etc. to determine why your top performers succeed.

Perhaps the reason that some employees aren’t efficient in Distribution Center 1 is because there isn’t enough work for all 12 employees. You can now reorganize accordingly. Maybe there is more of a given resource (an improved forklift model, for example) available in Distribution Center 2 that you should roll out in full to other centers to improve employee efficiency. With analytics, you can then quantify the ROI for rolling out either solution and make the best choice for your business.

Analytics will help you see the rhyme or reason behind your various successes and failures so that you can adjust appropriately. Then, you can roll out improvements that utilize these same high-performing solutions throughout your operation and across the enterprise.

Major players like Walmart and Home Depot have used analytics to great effect over the course of their lifetimes by mining data, establishing KPIs, and proving the ROI for their organizational solutions in this way.

Determine and Apply Industry Benchmarks

Now that you know how your operators, shifts, managers, and facilities compare to each other, you can also determine how they compare to your peers. Collecting general data about the successes of your competition allows you to establish industry-wide benchmarks as points of comparison. When you’re employing solutions that keep you competitive, you can confidently share them across your entire enterprise—therefore maximizing your results across the board.

Understanding the importance of industry benchmarks is essential, because almost every executive I’ve consulted with on this topic has a skewed impression about how they stack up to their competition. Most believe that they’re operating as efficiently as possible, but oftentimes assume so without the data to back up the assumption.

One large player in the intermodal containers space that I spoke with had this same issue with their utilization rate. This company had their rentable intermodal containers out on lease about 50% of the time. As a result, if they owned 20,000 intermodal containers, only 10,000 could be out on lease at any given time. Since they were using IoT devices to track their empty containers with multiple transportation management technologies, they assumed that these were excellent utilization rates. However, once their analytics database incorporated utilization rates from multiple competitors in their field, they were easily able to establish what percentile they truly occupied and make dramatic improvements.

Almost everyone thinks they’re in the 99th percentile, but establishing benchmarks allow you to see beyond your own solutions to understand your overall position in the market.

It’s also important to establish benchmarks between your company and your customers. Are certain customers easier to service? Are there fewer complaints with some customers? Are various customers more cost-effective? Do you lose time waiting for customers to return empty containers or trucks? These are the kinds of things that your analytics data can help you identify. Dive in and look at what the data is telling you on the most granular levels to get the most efficient results.

An Important Note About Business Intelligence vs. Analytics

Some executives that I speak with seem confused about the differences between Business Intelligence (BI) and analytics. Business Intelligence consists primarily of beautifully-presented dashboards and charts alongside actionable plans that are applicable in real-world situations.

Analytics, on the other hand, focuses on applying and manipulating variables through data mining to best determine what those actionable solutions should be. These variables then allow you to predict different outcomes to strategize for the future. Business Intelligence is also important but focuses mainly on real-time applications, rather than trends over time.

Data is Gold, But Allocating Resources Can Be Difficult

The major obstacle that prevents most executives from data mining is also what makes it so valuable: the sheer abundance of data is itself an obstacle. Because there is so much data collected daily, there must consequently be enough resources available to analyze it.

One executive that I spoke with from Ford had massive quantities of data, but only one expert available to analyze it. This person’s time was so in demand that it would take years before the executive could have the analyst turn his attention toward the projects that the executive wanted to address. As a big player in the supply chain industry, he was aware that analytics was the key to success but simply didn’t have the expert’s time at his disposal. He knew that his data was golden but had no way to mine it.

This is an almost universal problem for the executives that I speak with on the subject. I’ve written about the key to fixing this problem previously in my article, “More Data Than We Know What to Do With: Turn Around Your Data Utilization in 5 Steps” . It is essential to understand how important analytics will be for your business, then allocate the necessary resources to make it happen. The ROI is there, and it is worth it.

Analytics Turns Data Into Gold for Your Business

If you want to achieve growth year-over-year, then you need to make changes year-over-year. Whether you’re thinking of starting a business in IoT, implementing a new IoT solution in your own company, or even looking to mine your data more efficiently, I strongly urge you to allocate resources to implement a solid data mining strategy for your company this year.

Analytics will help you make your business more efficient, safer, and better than your peers. With it, you can truly move yourself into the 99th percentile of your industry—helping you get ahead and stay ahead of your competition.

For help with best practices, identifying the trends most worth investigating, or advice regarding analytics and data-driven IoT solutions, you can contact me via [insert contact info]. With over 25 years of experience leading the industry in logistics, IoT, supply chain, transportation, and analytics capabilities, I can set you on the right track to achieve massive growth.

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

If you’re like most technology companies, your projections for 2018 show a 15-20% increase over 2017. Predicting significant growth for the new year is a common practice for businesses, but is sometimes influenced by excess optimism coupled with a desire to assure investors of company progress. This is usually referred to as the hockey stick. This refers to the creation of a hockey stick shape on a graph, where growth has progressed slowly in the short term, but then suddenly rockets upward with impressive results.

To keep your 2018 projections from becoming an empty promise, be aware that the calendar change gives many the false impression that growth simply happens over time. Instead, real growth requires changes in your company’s plan. As you’re coming up to the end of this year, look at the steps, strategies, and advice I’ve outlined below to help you achieve your projected growth in 2018.

The Calendar Does Nothing for Your Business

One of my most beloved mentors and a former CEOs of IDSY, Jeffrey Jagid, often reminded me that nothing is different about the following year except that the calendar has changed. Many people often take the change this time of year for granted, expecting some shift that affects the business.

Don’t expect 20% growth simply because the calendar page turns.

To truly achieve those increased projections, you’ll need to implement quantifiable changes. After all, repeating the same action again and again while expecting different results is never going to get you where you need to go. Specific changes are required to meet the commitments you’ve made to your financial backers.

Approaches to Promote Growth: Top-Down vs. Bottom-Up

The best method to determine the necessary changes is to build a plan for 2018 using both a bottom-up and top-down approach. This allows you to truly account for the actions you must take to meet the expected growth.

Top-down plans consist of looking at the key elements that make up your revenue drivers, then increasing specific resources that impact those key elements. For example, you could determine the correlation between your number of salespeople and actual sales, then hire more salespeople until the number matches an expected increase in growth of about 15-20%. Keep in mind that additions like these will take time to structure, organize, and train. Adjusting for the expected time it will take to reach normal performance means that you should not expect the same level of productivity that you would from current employees. As a result, you could add the requisite number of resources or staff without quite achieving your targeted outcome.

A bottom-up approach, on the other hand, requires a look at all key accounts for the year. Rather than adding resources at the top, bottom-up approaches involve building up sales from the ground up —either through increasing business from current customers (more predictable), or through the addition of new customers (much more difficult to predict). I highly recommend using this approach, because it gives you a clearer view of the areas that need improvement in your sales process.

Using the Bottom-Up Approach to Take You to the Top

First, list your key accounts and identify what they will contribute from a revenue basis. When gathering this information, it’s crucial to go straight to the source—don’t just ask your salespeople this question. Salespeople are sometimes biased in this regard, because their compensation is based on how much revenue they bring in from each customer. As a result, they may be tempted to start sandbagging—whether they realize it or not. Sandbagging involves committing to a lower number of projected sales initially, then exceeding that number to yield a better bonus, or increased recognition. This may feel great when the company is pleasantly surprised with the salesperson’s performance, but can negatively impact your ability to accommodate the cumulative demands of all your clients if you’re prepared for a lower number of orders.

To mediate this issue, get your information from its source. Make sure that each salesperson meets with their key accounts to ask them important questions about what their spending will look like in 2018. Create a Gantt chart for each account for the year that outlines commitments on both sides, accountability for purchases, order delivery dates, major milestones, etc. This means you’ll have a path set for well-documented success in 2018.

Setting expectations early between your company and your customers is a great way to build trust, but it can also show where there’s room to sell larger orders to already important customers. As I’ve outlined in my blog about how to land F100 customers, large clients typically come with large budgets. Sometimes, a big purchase for your company could even be considered a rounding error for a major player. Planning in advance creates an opportunity to persuade them to allocate a bit more of that budget for your product. It also helps the salesperson achieve their goals, creating a nice dichotomy between what the salesperson hopes to achieve and what management expects.

Managing Potential Roadblocks

With change in any area, there could be roadblocks or hurdles to overcome. You may find that your sales team is resistant to setting these meetings because they don’t want to hear bad news. Remind your salespeople that this is a good thing; it gives them the opportunity to put energy into other accounts, or to improve the offering so that key accounts will prioritize your product in their budgets again. It’s better to know whether clients plan to purchase again as soon as possible to curb the negative effects.

Have your sales team communicate that you want to make sure your business will be able to support the client’s needs throughout the year. Importantly, it shows that you respect your client’s time and business enough to streamline their ordering process. Additional questions like, “what is your budget for our product this year?” and, “during which quarter do you expect to spend that budget?” will give you important insights about what your company’s coming year will truly look like.

In the end, if it’s not in the customer’s budget to make improvements, it’s probably not happening. So what else can you do as an executive to achieve your 15-20% growth? After establishing your bottom-up plan, you can move on to evaluating your top-down options. As we discussed earlier, this could involve:

Hiring additional salespeople

Adding new distribution partners—but you will need to incentivize them to prioritize your product over others they may be distributing.

For additional help, resources, or answers to questions, contact me at ken@kenehrman.com.

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

Making your technology valuable to your market is the most important part of growing your business—and pricing your products correctly is an essential part of that effort. If you want to make an impact in your target markets, the first step is to understand how your company’s tech differs from your competition. Most importantly, you should then build solutions that create real value for your customers.

When your technology can solve a problem, the primary element that determines its value is the magnitude of that problem. The ability to fix issues that have never been solved—or doing it better than your competition can—will help you achieve the best pricing.

I’ve outlined some important considerations to help you maximize functionality and pricing control below.

Understanding Your Chosen Market

When starting a technology company, your company will typically fall into one of two categories. You will ideally either be 1) an improver, or 2) a first mover. If you go to market as neither, you risk becoming white noise—especially in oversaturated and highly competitive fields.

Improvers

If your technology company is an improver, this means you are entering an existing market with a solution that improves either the price, quality, or functionality of current “state of the art” tech. In this case, the market value and price of your product is generally established and known.

There are many benefits to improving technologies that can work in your company’s favor. Namely, you can challenge competitors by adopting an existing technology, then offer a version that is cheaper or better than ones that exist in the market. Prices and expectations are already established by competitors in these scenarios, making your path to revenue more clear and precise than the one traveled by first movers.

First Movers

If your tech company is a first mover, you are creating a completely new technology that establishes an otherwise non-existent market. This allows you to operate on a “green field”, where you can set expectations for both pricing and performance. You can also own that market for the duration of time when you are the only provider of your new product. Steps can be taken to increase that length of time, essentially creating a temporary, yet legal, monopoly.

Why Companies Should Focus On Functionality Over Cost

Regardless of whether you’re entering or establishing a new market, determining price is enormously important—but can be challenging.

Improvers that offer less expensive tech to undercut competition can certainly earn great revenue and build a thriving business from that model. However, I strongly suggest focusing on your technology’s functionality, even if offering less expensive solutions are your company’s chosen method of revenue generation. If you do, you can protect your company’s tech in a variety of ways.

First, adding capabilities means that you can file for patents for the added features that you’ve created. This increases the barrier to entry for your competition—slowing them down as they try to catch up to you. It also proves that you hold a legal advantage over other providers and have developed something unique. This is an effective sales tool that should not be overestimated.

Second, providing added functionality means that you will be more in control of your prices. When you can solve a problem, the value of your product is now equivalent to the company’s savings as a result of fixing that problem.

Third, it protects you from price wars. By creating concrete and tangible benefits to using your tech, you take the focus off its cost. However, if you only offer the same technology as others but at a lower price, all that a competitor needs to negatively impact your business proposition is to find a way to match you.

How to Improve Your Technology’s Functionality

To do this, focus on what your technology can do, rather than limiting yourself to thinking about what you should charge for your product. Consider how your tech affects your customer’s ROI or solves industry problems. Will it automate an existing business process? Will it make things easier for your client? Will their supply chain be more effective? Can it help customers make more precise projections? It needs to be simple to understand, and easy to articulate.

Make sure that you can justify why your customer needs your technology. This is where you need to use a little business savvy to put together a strong, concise elevator pitch. Find your customers’ pain points and address them with improved functionality over your competition. Then, determine how those improvements affect their ROI. If your technology can dramatically increase their ROI or reduce costs, then you can justify prices that are potentially far higher than the current rate for a comparable solution.

Increased Functionality In Action

A great way to illustrate these benefits in action is with an early example from I.D. Systems. Soon after I founded IDSY, we decided to develop a smart RFID tag and act as improvers to the existing RFID market. We shifted our attention away from the price of the product itself in favor of focusing on how the functionality of our units could dramatically increase clients’ ROI. Instead of developing a tag that was less expensive, we put processing power and memory in the tags to allow them to do more.

We began by developing a smart tag to track letters for the US Postal Service. At the time, the Postal Service wanted to use a smart tag because “dumb” tags did not work in their environment. Our tags worked better than competitors’, so we were able to price them at $250 each—a number previously unheard of in the industry. As we looked to further add functionality to our tags, we saw an opportunity to track and monitor forklifts inside of the Postal facilities. As I delved deeper into the forklift logistics industry, I realized that there was real demand for our solution beyond simply tracking their location. There were crucial opportunities to fix significant safety and productivity issues surrounding forklift operation, so we targeted them.

There could be hundreds of forklifts in each warehouse, but it would be impossible for operators to carry hundreds of keys to drive them when they need one. As a result, keys were routinely left in the ignition for anyone to start operating—whether that individual had the training and clearance to do so, or not. We added a card reader to our RFID tags to provide a method for intelligently controlling what individual was operating which forklift and at what time, which also increased employee safety and prevented injuries or deaths caused by untrained operators.

Another major function of our technology was the ability to drastically increase productivity. We found that among those surveyed, operators who were being paid for eight hours of operation were only on forklifts for four hours. Out of those four hours, only two were spent moving the forklifts, and only one hour on average was spent moving product. With numbers like that, we knew that even a 1% increase in efficiency would produce a one-year ROI for our customer. Our system installation would therefore more than pay for itself.

These insights meant that we were able to price our technology at $2,000.00 (!) per RFID tag on each forklift. This cost was unheard of for RFID tags in ‘95, when our competitors’ solutions were priced at $20-40 per unit.

The tag price alone was much less important than the business automation processes and problems that we were trying to solve, because solving those problems made our technology much more valuable than it otherwise would have been. Additional functionality allowed us to focus on breaking new ground, which eventually led to a much higher value for the units we were building. Because we shifted the focus from price to functionality, it was clear that our solution was well worth the cost due to the increased ROI after the installation. We started as improvers by making “smart tags” and became first movers by adapting them to the needs of forklift management.

Ultimately, you can create higher demand for your product by emphasizing what the tech does over what the tech costs. If you focus on processes and functions that benefit your customer’s ROI, you will generate consistent revenue. It will help you justify significant price increases if needed, make a clear argument for why clients should choose your tech over your competitors’, allow you to quickly scale your company, and help you dominate your chosen market.

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

]]>http://kenehrman.com/2017/11/pricing-your-tech-what-your-product-does-is-more-important-than-what-it-costs/feed/0Taking On the Giants: How Small to Midsize IoT Tech Providers Can Land Fortune 100 Customershttp://kenehrman.com/2017/11/taking-on-the-giants-how-small-to-midsize-iot-tech-providers-can-land-fortune-100-customers/
http://kenehrman.com/2017/11/taking-on-the-giants-how-small-to-midsize-iot-tech-providers-can-land-fortune-100-customers/#respondWed, 01 Nov 2017 20:35:36 +0000http://kenehrman.com/?p=1003

The Ehrman LIST series aims to provide insights and advice on how to accelerate revenue and earnings with regard to the Logistics, IoT, Supply Chain & Transportation industries.

As a small to midsize Internet of Things (IoT) provider, landing a Fortune 100 company as your client is a huge undertaking with potentially massive benefits for your company’s earnings. F100 customers are large—meaning that they have much to gain from understanding how best to use their assets, where their high-value assets are, and how they can generate more revenue with an Industrial Internet of Things (IIoT) solution.

The Benefits of Working With the Giants

You may be inclined to think that the Giants will only seek out solutions from other Giants. After all, large corporations may have already established relationships with other giant companies. However, as the IoT continues to surge in popularity, we’ll continue to see more opportunities for small to midsize companies. Smaller companies are often agile and nimble, and you may have a more up-to-date IoT solution in comparison with your Giant competitor. Experts like Peter Bowen, a partner at Bain & Company, are specifically urging the giants of industry to adopt technologies from small companies—arguing that, “smaller platforms…often have better traction in the market, especially when it comes to addressing specialized use cases and niche applications of IoT” (Violino). With influencers suggesting that the best solutions can sometimes fly under-the-radar, large companies will be looking for unique solutions from unexpected providers.

As a result, you need to be ready to work with the giants of your target industry. The timing has never been better to become one of the big-league Industrial IoT providers. Being ready for the coming years of IoT adoption can create huge results for your tech company, because what’s comparatively small for a giant F100 company is going to be a large revenue increase for a small to midsize tech provider.

On top of the potential for expensive orders, an initial successful installation of your technology can prove your value proposition, support the idea that the ROI is there for your large F100 customer, and—most importantly—create the potential for follow-on orders.

For example, I was able to facilitate a 50,000 unit IoT device order fairly recently with Avis rental car on behalf of I.D. Systems. This represents only 10% of Avis’s entire fleet size, meaning that as I.D. Systems continues with the contract, their successful rollout of the solution can result in a 10-fold increase in revenue if Avis decides to adopt the technology throughout their whole fleet.

Don’t Enter the Big Leagues Unprepared

For the reasons listed above, working with the Giants at the F100 level is appealing, to say the least. You should know, though, that they’re the most demanding customers in the world. They expect everything to work, and they expect it to work flawlessly. Any data anomalies will be scrutinized thoroughly. Because things scale quickly with big enterprises, a small issue can result in huge expenses across a large company.

In addition, the employee count, hierarchy and associated pressures can impact your technology solution. The champion that you may have a relationship with can potentially have hundreds of company employees who work below or above that individual (if it works right, potentially thousands could be impacted in other departments of the company). They may be resistant to change or have established methods that don’t integrate well with your solution. It’s important to know that these are influences you’ll have to overcome when selling your solution to a company on a giant scale. As you embrace and install the latest and greatest technologies for F100 companies, these influencers could potentially be a roadblock.

In my experience, pursuing F100 companies ultimately pays off in a big way. After founding I.D. Systems, we had various projects that grew from several hundred thousand to tens of millions of dollars because of the sheer size of these F100 companies, and the value we brought to an operation of that scale.

Fending Off Big Competitors and Winning F100 Customers

Now that you know the benefits and potential drawbacks of working with the giants, here are a few steps that will help you develop relationships and sell your product to F100 companies:

1) Find a Champion

First and foremost, you need to find a champion for your technology. If you don’t have a champion in one of these large organizations, you don’t have much of a chance. You can spend months or years trying out cold selling, but getting nowhere. You need to find someone within the organization who wants to make a difference, make an impression within the company, and specifically someonewho wants to buy from you more than you want to sell to them. This will put you on the path to signing F100 companies and achieving success.

2) Offer A Pilot If They Aren’t Ready To Buy

The second step is to install a pilot. This is hugely important, because it means that you build trust while being able to scale your solution safely. Back when I.D Systems started, I used this pilot method to gain Ford Motor Company as one of our initial customers. To catch their attention, I sent a one-page fax to Ford Motor Company, inquiring whether they might have any interest in trying a pilot (without requiring payment), to ensure that our solution has the capabilities necessary to meet the requirements for a company of Ford’s size to track, monitor and control their forklift fleets. This piqued their interest, because there were many potential benefits and very few risks.

From this humble one-page fax, we quickly received a response from the Advanced Technology Manufacturing Division of Ford, saying that they were indeed interested in implementing a pilot. They participated in our trial, and actually covered our expenses. We secured their eventual buy-in by building trust and confidence in our technology. They became one of our first commercial customers, and decided to purchase the solution for their largest facility in Detroit, MI.

3) Ask Tough Questions to Determine the ROI Up-Front:

It’s very important to determine the ROI up-front. Don’t fall into the trap of offering free pilots without first specifically identifying and determining the key measures of success. Don’t be afraid to ask what those measures of success are, and don’t be afraid to ask what happens if you are successful. You need to make sure that these customers understand the value proposition, and how it can be tailored to them. Asking those questions shouldn’t be met with resistance, because they’ll want to identify those milestones and challenges as much as you do.

Failing to establish the success criteria can be detrimental to your technology company for various reasons. You, as the provider, may be delivering great pilot results, but without a solid understanding and agreement between both parties, the customer may not be seeing exactly what they’d hoped for. Alternatively, your pilot can exceed expectations. Failing to set the expectations puts your customer in an advantageous position because your success can set an unrealistic baseline for negotiations, and you might not know how your solution truly measures up against the expectations of big clients. Rather than having the customer set your expectations, you are setting theirs. If you overachieve in this instance, you might not be rewarded as well because they would view this high bar you’ve set as the standard. This can cause additional purchases to stall for months or years. Identify the success criteria, then make sure you feel comfortable with the measurements as well as the stakeholders’ goals.

To do so, ask yourself these questions:

What is the budget?

Who approves it?

When does the budget get approved and what does the budget cycle look like?

Can you meet with the decision makers?

This is extremely important, because decision-makers will often have questions that your champion can’t answer. It’s very important that your champion understands that you’re a team that needs to work together, and allows you to participate when possible in approval meetings. Make sure that the success criteria are important to the decision-maker as well. Confirm that your champion and the gatekeeper are on the same page. If you want to do business with F100 companies, you need to determine what the success might mean in order to put you on the best path to progressing your business and providing solutions to the largest potential users of your offering.

4) Meet Or Exceed The Expectations That You Determine With Your F100 Customer:

Make sure you do meet or exceed expectations. Do NOT say it will take 3 months to install the pilot but then take 6 months. This puts your champion at significant risk. You need to create trust in the relationship, make sure that your company can make agreements, keep those promises to create a successful partnership from the start.

For example, we received an order from Home Depot to install in 4 distribution centers fairly early on. Once that was completed, we would use that as a measure for success to move on to their remaining 120 centers. At that time, it took us almost a year to install 4 distribution centers, because we didn’t have the means to prioritize Home Depot over our many other customers who had more pressing concerns. At the end of the first year, our champion (who was initially extremely committed and enthusiastic) had to take a step back and reevaluate the benefits, because at the previously established rate, it would take 30 years to roll out the solution to all distribution centers. So, make sure to take all of your other pilots and contracts into account before committing to something. Installing in 4 distribution centers may have been reasonable on its own, but in light of our other commitments, we had prioritization issues that we learned to anticipate in order to properly meet or exceed expectations. This could have been avoided effectively when establishing the scope of our project. For example, when determining the scope of a pilot, guiding your customers’ expectations makes all the difference. Qualify your claims. Make commitments and keep them.

5) Make Sure You Have Patents

One of the best justifications for your value proposition is that your F100 customer won’t be able to find a solution like yours anywhere else. You must have a unique technology if you’re in the internet of things business. If you don’t already have patents, make sure you have patents pending. Submitting patents is well worth the benefits. Identify where your technology is unique and then patent the solution.
These are some of the most important elements that are involved in working with the giants and F100 companies. Make sure you keep them in mind whenever you move forward with a potential client, but especially in high-stakes scenarios where securing customer confidence can result in tens of millions of dollars in additional revenue over time.
For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. I’ll be bringing you helpful information designed to put you in the path of success when it comes to Industrial IoT and emerging technologies, and keeping you up-to-date with news and resources. Having experience or guidance in both the IoT technologies themselves and the industries that use them will be the key to remaining or becoming competitive during the current IoT boom. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

For direct inquiries, feel free to send a direct message via Twitter or LinkedIn, or you can contact me at ken@kenehrman.com.

The Internet of Things is growing at impressive rates across all industries and sectors, fundamentally changing the way companies manage their assets. Companies are increasing their use of intelligent assets, but often fail to utilize them to their maximum potential—thus failing to reduce costs, increase savings, and improve business operations. As a result, optimizing your company’s high value assets is more important than ever. Because IoT is causing these globally changing technological and industrial shifts, the companies who adopt sooner will receive the most benefits and significantly outpace their competition. Those who choose not to optimize will be left far behind, and will have more trouble than ever catching up.

Luckily, there’s no reason to be a pioneer anymore. Follow these 5 Steps to optimizing your intelligent assets.

Evaluating and improving your intelligent asset utilization is key to staying competitive in the IoT age

1) Evaluate the Current Value of Your Most Important Assets

The first step toward optimization is to understand the value of your most important assets. To do this, ask yourself if they drive revenue, or if they’re a cost center. Determine the assets’ current utilization rates, as well as the associated cost per hour to own and operate them. Are these assets typically where they’re supposed to be when they need to be there? If not, calculate the cost incurred due to time lost to start evaluating what improvements can be made.

Then, take note of your existing data collection process. Is today’s data collected manually? If so, what is the cost to collect it (in time, manpower, resources used that could be allocated elsewhere), coupled with the added cost of lag time between data collection and data entry time? When you have the answer, add how much it will cost to rectify any accuracy issues you may have found.

Cataloging your current asset operational costs will establish the baseline by which you can measure the effectiveness of your optimization strategy.

2) Direct Your Optimization Goals

Once you have established your assets’ current value and costs, turn your attention toward establishing your business objectives. For example, those in the trucking industry are constantly looking for ways to get to a 99% tractor utilization while minimizing dead-heading (running without loads). If a company typically only has a 50% forklift utilization rate, they need to determine how much the business could save with improved utilization rates and better time/location accountability.

Typically, the cost to own and operate a forklift truck exceeds $150,000/year. Thus, a 1% improvement in costs saves nearly $1,500/truck/year. In addition, what would be the savings or revenue impact if data about the status of the assets (location, fuel level, impacts, driver name, speed, temperature, etc.) were available in real time? For example, in the rental car industry, drivers are charged for fuel used when they return. By accurately collecting fuel levels upon a customer’s return, results have shown an increase of more than $2/rental!

The cost tiers for owning and operating a forklift truck

As you determine the benefits and goals of your optimization solution, consider the business objectives that drive them. Achieving the benefits of increased productivity and increased savings could help executives internally make the case for fleet expansion, or it could open the possibility of accepting more orders to increase revenue. Determining your business objectives provides clear reasoning for your optimization goals, allowing you to evaluate the benefits in context and plan for specific outcomes as you optimize.

3) Assess Benefits in Relations to Potential Optimization Costs:

Next, evaluate the potential benefits vs. the cost to collect data. With your business objectives and optimization goals in mind, determine exactly what data you would collect. If the business objective is to optimize the assets’ location efficiency to expand truck routes and reduce overlap, this will help determine your data collection strategy. Some data points are easier to collect than others, and this will be factored into your collection costs.

Another factor in the price of data collection is how frequently you collect it. Sometimes once a day is good enough to make a measurable impact. Next, determine who would use that data. Would it be automatically fed into another existing software system? With all these considerations in play, you can compare the advantages or benefits of optimizing your intelligent assets against the cost of those improvements. If your solution costs more that the returns, look for additional opportunities to automate data collection, or problem-solve to reduce the costs of your solution.

Note: some of the best applications are those which automate a data collection task that is currently done manually. Further quantify the savings if the data were accurately and collected on the optimum schedule.

4) Pilot Test to Reduce Risk

Install a pilot of your proposed intelligent asset solution to a) validate your assumptions and b) collect meaningful data from the most critical assets when you need it. Before you start the pilot, make sure that you have used all tools and software at your disposal to estimate today’s utilization rates as outlined in Step 1.

Creating a properly sized pilot can be a challenge. When running a rental car pilot, for example, cars can leave one facility for another on the first rental. It’s therefore important to pick an exemplary island. For forklifts, pick a plant that has room for improvement, or one that is known for being progressive when it comes to embracing new technologies. Alternatively, you can select a specific customer to try the system, then see if they like the new real-time visibility. Once the pilot is complete, the results need to accurately extrapolate from a pilot to predict the value for the entire enterprise.

5) Compare Results and Expectations to Yield More Top Performers:

Use the data you’ve gathered to identify your top performers, then spend the time to uncover why they are top performers to see if you can use similar approaches to improve the performance of bottom performers. Top performers, once identified through IIoT data, can help improve the entire business by helping identify what the best practices are that must be shared throughout an enterprise—whether it’s a high performing person, group, a shift, a plant, or an entire division.

Analytics software will help you set benchmarks by looking at past trends to help predict the future. Finding how low utilization rates went during the last recession or during the last several years of expansion will help you prepare for other similar instances in the future. Once you’ve spent the time optimizing, find how that data can help predict the number of assets you need as your business grows.

These same analytics methods can also help you compare your data with your peers. Who doesn’t want to be in the 99th percentile in their industry? Many mistakenly think that they are leaders in their industry, though it’s much more likely that they are just average. Look at how good the best in the business have become, and compare your results with theirs to set your expectations. If your assets are at 60% utilization, that would put you in the 50th percentile in the trailer industry. It would certainly help to know that 80% utilization would put you in the 95th percentile while setting your organization’s targets.

Implementing the Steps

Completing these steps as soon as possible is critical to your company’s continued success, but be sure to focus on confirmed business cadence. Custom solutions may seem enticing, but proven approaches like the steps outlined above are the best way to achieve results. Your business objectives may differ from your competition, and these will be the factors that differentiate you from other companies. There is still time to become an early adopter, but there are enough successful cases of intelligent asset optimization that you shouldn’t need to reinvent the wheel.

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

In today’s world of competing projects, there are usually many proposals an executive considers implementing throughout the year…a marketing campaign to increase sales, a new software program to reduce costs, etc. Creating a compelling ROI is a well-established critical sales tool used to make your proposal stand out from the others. The problem is that your prospect doesn’t believe they will get the ROI from your project— and you don’t either.

Let’s start with the simple definition of ROI: Return On Investment

In this scenario, a company or prospect makes a $1M dollar investment in your solution. If they achieve a 1-year ROI, it means that at the end of year one they will have either saved $1M or increased revenue by $1M. In other words, the system will have returned their entire investment while they still own and operate your system. In this way, they’re setting themselves up for returns of an additional $1M every year thereafter.

If you could invest $1M in the stock market and be guaranteed a $1M return in year one, followed by $1M every year, that’s a 100% ROI. If the risks were minimal, everyone would make that investment. Realistically, most people of working age need to take moderate risks to obtain just a 10% return in the stock market or real estate investments. Many people are even willing to take sizable risks with their savings to obtain a 20-30% return.

What’s the Difference Between Buying Stock and Achieving ROI in a Company?

In the stock market, the return is generally quick and easy to see—you buy the stock, track it daily, and the ROI is easy to calculate. You can also sell at any time to limit your downside if the risks become too great. Your sales process must encourage your prospects to consider your proposal in the same way. The savings achieved from an ROI project are just like gains from buying a stock. In fact, cost savings drop straight to a company’s bottom line. Companies with a 10% operating margin would have to sell $10M in product to get a $1M equivalent savings. However, an ROI project offers the unique ability for you and your customer to control returns to some degree.

Years ago, FedEx was approached to build an in-line scale that measured the weight of each package as it traversed the conveyer system in Memphis. It measured the actual weight of each package without slowing it down and automatically updated the Bill of Lading (BOL) to charge the customer for the package’s actual weight. Previously, FedEx billed the customer by using manually written weights on the outside of the package. To determine the ROI of the proposed inline scale system, FedEx selected 1,000 random packages and compared the manually written weight with the actual weight, then analyzed the revenue increase if FedEx billed accurately. The resulting comparison showed an average revenue increase of $2/package if the scale system was used to calculate the charges. While the inline system cost $100M, FedEx shipped nearly 1M packages per week through their Memphis hub. That’s a 50-day ROI! It’s easy to see and understand why that system was implemented. Who wouldn’t make that investment? It’s a $100M dollar deal! In fact, savings like this are so compelling that not making the investment would be riskier for an executive than making it.

Tools to Develop & Communicate Value

As a result, the goal for any ROI project is to understand your business proposition and make your solution just as much of a “no brainer”.

To do so, ask yourself these questions:

Is the return clear and easy to calculate?

Will it take a lot of work to achieve the ROI, and by whom will the work be done?

Are there actual tangible savings or revenue increases that will be easy to demonstrate to others in the organization?

When will the savings start?

What are the risks to achieving the ROI, or what can change that can prevent the ROI from materializing?

Are the dollars significant to the person or company?

Is the prospect buying specifically to achieve an ROI or is there another more intangible reason?

Ultimately, you need to believe in the ROI as much as, if not more than, your customer or prospect. You need to make it very clear, easy to track, and easy to demonstrate—ideally with little or no work from the prospect. Can the savings be automated and accrued without significant effort or analysis?

If the answers to these questions are favorable, then discuss the stock market comparison with prospects that need it. A one-year ROI means 100% return every year!

Imagine buying a stock that doubled every year­—but unlike the stock market, you and your customer as a team can actually affect the returns. These projects are not like buying a stock whose price you can’t influence. A good ROI project should be one where you obtain a 25% return with no effort, then up to 100-200% returns with a realistic amount of effort.

Bottom line: If it were your money, you would obviously do it. You need to make that decision just as obvious to your customer. And if you don’t believe it’s realistic for the solution you are selling, either get there by looking at others who are achieving an ROI with your system or start selling something else!

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

]]>http://kenehrman.com/2017/08/no-one-believes-your-roi-not-even-you/feed/0Choosing the Right IIoT Project Lead: The Top 7 Qualities You Should Look Forhttp://kenehrman.com/2017/08/choosing-the-right-iiot-project-lead-the-top-7-qualities-you-should-look-for/
http://kenehrman.com/2017/08/choosing-the-right-iiot-project-lead-the-top-7-qualities-you-should-look-for/#respondWed, 23 Aug 2017 06:49:55 +0000http://kenehrman.com/?p=933

I recently released an article where I listed 5 Steps to Take NOW to Make This the Best of Times for Your Organization. In it, I stressed that the first step to making tangible progress for your business is selecting the right person to lead the Industrial IoT project that you implement. This step carries major consequences if taken lightly, because your selection will have lasting effects on all facets of your Industrial IoT project.

In a recent survey, 67% of companies have yet to begin implementing Industrial IoT (IIoT) solutions in their business (Pittman 2017)—resulting in major issues as competitors optimize their own operations with state-of-the-art solutions. However, incentives like reduced expenses and increased ROI are now driving companies to adopt IIoT in droves, with 74% of those companies planning to implement their first IIoT solution by the end of the year (Pittman 2017). Shifting industry regulations like the upcoming ELD (Electronic Logging Device) Mandate are also pushing corporations to quickly implement IIoT solutions (Omnitracs 2017). Between possible or impending mandates, benefits for your company, and the need to stay ahead of your competition, there is no reason to wait to launch your IoT solution. You may even face major hurdles if you wait, falling behind your competition and scrambling to meet all requirements for the next major mandate that affects your industry.

With so much at stake, the person you select should have a certain level of skill and experience, as well as the ability to leverage it effectively. In the race for industry leadership, finding the right person with the right mindset is perhaps the most important of the five steps in my 5-Step Process. So when you plan, look at candidates with the following qualities to make that selection:

THE TOP 7 QUALITIES OF A GREAT IIoT LEADER

Choosing the right person to lead your Industrial IoT project is essential to its success AND your company’s ability to cut costs, increase ROI, and stay ahead of your competition.

7) Strong Technical Background:

Select someone who understands industry trends in IIoT and can apply them appropriately to your business. Do you need satellite, cellular or WiFi? Where will the industry be in 5-10 years? They do not have to be an engineer, but the project will need to be forward-thinking to ensure it can have a lasting effect on the business.

6) Ability to Understand Customers:

The project should positively affect the experience of your customers. Make sure to select a leader who is customer-oriented, considers customers’ needs, and ensures the project enhances the customer experience wherever possible.

5) Financial Experience:

Your project leader must understand financial planning and P&L management. The project must quantifiably save the business money, so properly accounting for the dollars saved is critical to selling the project as it progresses. If there is no money saved, it is not a good project—or is at least being managed poorly. No matter what task is automated, there should be measurable and quantifiable savings, and the right leader must be able to account for them.

4) Data-Oriented:

The leader should be data oriented—someone who relies on data to make decisions, not just “gut feel”. It’s hard to argue with data, so this skill is crucial. A leader who knows how to look for and articulate the data used to justify the project will be the right person to lead the project.

3) Operations Background:

Your project leader should have a heavy operations background, understanding exactly how your business is conducted today, down to the littlest (and often most important) details. By being armed with the details, the project will be properly focused on automating the right tasks—ideally, tasks that are mindless and prone to user data entry errors, but which have a significant impact on costs, quality, revenue, or customer satisfaction.

2) Proven History:

Select someone who has a proven history of successfully leading projects. The experienced leader will be given the benefit of the doubt by peers when the project takes longer and costs more than anticipated. They will need to be persistent. A successful history brings confidence for all involved in the project because of the candidate’s qualifications and knowledge of your company’s strengths and areas of improvement. Do not select someone from outside the company, because there is no way an outsider could know how business is really done as well as someone with 25 years of experience in your company.

1) Influence:

Perhaps the most important quality to pay attention to is the executive’s level of influence. Expertise in certain areas can be brought in by enlisting a great advisor or contracting a specialist, but the influence brought to the table by a trusted executive results in necessary trust and direction. It’s often difficult to affect change in a company—especially a large company. Employees are typically set in their ways and change is threatening, especially to long-time employees with firmly established routines. The person who leads the IIoT project must have influence in all affected areas of the business, as well as the support of top management. To gain that support, they need to be good “salespeople”, evangelizing the benefits that will be obtained and pushing through the roadblocks and obstacles he/she will face by promoting the vision of the final solution.

While these qualities are essential at the top level of your IIoT project, hiring an outside consultant is worthwhile. This person doesn’t lead the project, but provides insight and suggestions. The outside consultant should have ample experience and a proven track record with successful IoT projects, enabling them to provide relevant guidance for your internal project lead.

Finding as many qualities listed above as possible will point to the right leader to run your IIoT project. By following the guidelines above and using the 5-Step Process I’ve outlined here, you will undoubtedly see tangible improvements to your business from beginning to end.

For more like this, subscribe below for my Ehrman LIST, where I bring you essential content, insights, and information regarding Logistics, IoT, Supply Chain, & Transportation. Always be in-the-know, with regular updates that provide the best tools to keep your company’s solutions on the cutting edge.

]]>http://kenehrman.com/2017/08/choosing-the-right-iiot-project-lead-the-top-7-qualities-you-should-look-for/feed/0More Data Than We Know What to Do With: Turn Around Your Data Utilization in 5 Stepshttp://kenehrman.com/2017/07/more-data-than-we-know-what-to-do-with-turn-around-your-data-utilization-in-5-steps/
http://kenehrman.com/2017/07/more-data-than-we-know-what-to-do-with-turn-around-your-data-utilization-in-5-steps/#respondWed, 26 Jul 2017 15:32:33 +0000http://kenehrman.com/?p=917

I want to thank everyone for their feedback on my industry brief, “It’s the Best of Times and the Worst of Times for the Internet of Things”. I was not surprised to hear a consistent theme in responses from several Fortune 100 end-users of Industrial IoT (IIoT). They felt that limited resources should be listed as a “worst of times” factor that remains in the industry.

Despite the general certainty that IIoT data could save tens of millions of dollars for their businesses, most executives that I spoke with are concerned that they are unable to get the technical resources they need to analyze their data. I recently spoke with a connection of mine, an executive from one of the top automobile manufacturers, about this topic. He told me that he has only one data expert from MIT, and that this expert’s time is in such high demand that it would be years until he is available to help with the IIoT data being obtained from their vehicle fleet.

Another executive from a major rental car company also spoke with me about his data troubles. He explained that despite having data across many sources and time periods, the company is unable to use it when making changes or improvements, as they knew they could with the proper resources. As rental car companies are deploying IIoT on their rental cars, it’s important that they synthesize the data obtained with their other systems and make meaningful changes to their businesses. The executive I spoke to, who wished to remain anonymous, sounded extremely frustrated.

This same message came from many other professional contacts, all of whom felt that the data could drive meaningful improvements in their businesses but that they did not have the resources to investigate and create an action plan to realize them. As a result, I have been asked to consult with contacts across various industries—from transportation to software—to aggressively pursue this significant business opportunity.

Limited resources are real and current problems in the industry, and need to be addressed. To rapidly address this issue and knock down the barriers to better ROI through the smart use of data, execs should follow my suggested 5 Steps to Achieve Benefits in IIoT NOW.

When these steps are taken—from identifying a top-level lead for IIoT projects, to buying and implementing the right solution—executives will be able to secure the resources needed to analyze the data they have already made the investments to generate.

Step 1—Assign an experienced senior executive to IIoT full-time. With the proper leader who understands the business, IIoT projects that drive the most revenue or operational benefits will be pursued with more urgency. This adjustment or reorganization process is a crucial initiative, essential for maximizing your ROI or reducing expenses so that your company remains ahead of your competition. Once the executive assignment has been made, your new IIoT leader can help define the scope and establish what resources or talent will be necessary for your IIoT project.

Step 2—Identify the Highest-Value Assets that drive revenue and productivity within your organization. Most companies, especially larger ones like F100s, have assets like trailers, forklifts, fixed equipment, automobiles, containers, chassis, or trailers in their supply chain & transportation network. Identify which are being tracked today and how it’s being done. Include labor costs for operation of those assets when applicable during your assessment, as well as any safety concerns. Then, if there is any utilization data available for those assets, do a quick analysis of the cost savings obtained by improving asset utilization and performance.

Step 3—Brainstorm with your executive team about the value of tracking, monitoring, and controlling these assets. Will your customers see improved on-time delivery? Can you improve the velocity of goods moving through your supply chain reducing transportation costs as well as out-of-stocks? Can you do a better job identifying bottlenecks in your supply chain processes? What data would you want from these high-value assets?

Step 4—Find the right IIoT partner, ideally one that provides an off-the-shelf solution that significantly reduces time-to-value while improving the quality of your experience. Custom solutions may seem worth pursuing, but typically take 6 months—potentially even a year or more—to achieve. Additionally, they are more challenging to support once completed. Most current IIoT applications no longer need to be sole sourced, so create competition between suppliers by starting with two.

Step 5—Buy and implement the solution cautiously, addressing concerns wherever they arise within the company. Resistance to change is common, but when you can show that your IIoT solution has been clearly worked through, there will be fewer roadblocks in the way of receiving the necessary support.

For example, if you initially set a goal of a 20% ROI, you can claim some success as proof of the solution’s value. When the opportunity is fully considered and the improvements can be seen, it’s easy to be too aggressive and attempt to achieve benefits in the multiple areas of the business that are affected. While it will take more time, and even more buy-in to slow the overall progress of the project, you can use these successes to set higher goals once your IIoT solution has been implemented and some results have been achieved. In this way, you can easily meet or even exceed your organization’s expectations.

Last, roll out with the lessons learned and go back to Step One to Identify the next round of highest-value assets!

There are so many benefits that can be obtained by IIoT. A one-year ROI can be achieved with only a 1% improvement in asset utilization. While aiming for a one-year ROI is a big commitment, you can easily work toward it by setting realistic goals and committing to the 5-Step process outlined above. But don’t stop there: dig deeper to obtain all the benefits the system can provide.

Once this 5-Step process is in place, any necessary resources will be made available because the business benefits will be so compelling. All costs associated with bringing in the necessary resources are dwarfed by the potential benefits. For example, a company with 5,000 forklifts running two shifts that can achieve a 5% improvement in utilization (a realistic first goal) would save approximately $50M per year. When savings like this are reached, some of that capital can be invested back into the company in the form of more extensive IIoT solutions or expanding the analysis team. As a result, focusing on processes that can be completely automated by your chosen IIoT solution means that you do not have to rely on people running reports or taking action; the benefits materialize automatically.

For an additional in-depth look at this and other issues regarding IIoT implementation, please sign up for my free LIVE webinar on August 2nd at 1pm EST! The webinar covers material from my industry brief, “It’s the Best of Times and the Worst of Times for the Internet of Things,” as well as the 5 Steps outlined in this article. I’ll be speaking about more of my own industry experiences, providing in-depth examples, and answering questions. Follow the link below to register, where you’ll gain more actionable tips and information on IIoT Solutions that will help your business thrive.

]]>http://kenehrman.com/2017/07/more-data-than-we-know-what-to-do-with-turn-around-your-data-utilization-in-5-steps/feed/0Why NOW is the Time to Get Serious About Your Industrial IoT Strategyhttp://kenehrman.com/2017/07/why-now-is-the-time-to-get-serious-about-your-industrial-iot-strategy/
http://kenehrman.com/2017/07/why-now-is-the-time-to-get-serious-about-your-industrial-iot-strategy/#respondWed, 12 Jul 2017 00:14:56 +0000http://kenehrman.com/?p=891

I’m always surprised when I speak with an executive in supply chain, logistics, or transportation who still believes that the Internet of Things (IoT) is mostly hype—while at the same time, the disruptors to these traditional industries are utilizing smart, connected technologies to accomplish their missions.

As one of the earliest players in Vehicle Management Systems, I’ve been in a unique position to watch the evolution of Industrial IoT (IIoT). When I founded I.D. Systems 25 years ago, the idea of tracking and monitoring physical assets (e.g., forklift trucks, trailers, intermodal containers, airport vehicles, rental cars) was new and often approached very conservatively by industry executives.

Today, companies wouldn’t consider operating without not only having visibility to those critical assets, but also managing them virtually. In fact, playing to win in the progressively more connected economy means focusing on velocity vs. visibility: moving product to market faster, more cost effectively, accelerating delivery to customers, and increasing utilization of their key assets…

Accomplishing this in today’s market requires connecting the key pieces of the value chain via the Internet and enabling this optimization based on both historical analytics and algorithms that drive real-time, activity-based decisions.

We’ve seen players like Walmart and Amazon use velocity in their supply chain and distribution as a key strategy to disrupt traditional competitors. We’ll see these types of disruptions expand into other industries and threaten the market positions of entrenched leaders.

It’s no wonder that every leading industry analyst projects enormous adoption and market growth over the next 3 – 4 years. The IIoT market is projected to be US$150 billion by 2020 with global growth of almost 28% CAGR.

The good news for companies that have been reticent to invest in IIoT is that the costs of adoption are lower than ever. The costs of key elements—sensors, bandwidth, equipment, storage—have all been driven down significantly and that trend will continue as manufacturing automation increases and other market dynamics play out.

Sources: HIS, HSBC, A.T. Kearney, Internet World Stats

I’m not implying that there are no risks to implementing a comprehensive IIoT strategy. Some of the top concerns of executives regarding IIoT adoption, such as cybersecurity, lack of standardization, and limitations of legacy systems, present very real challenges. I believe, however, that we have reached the tipping point in the market where the benefits far outweigh the understood risks, and every company in supply chain, logistics, and transportation has to consider the unknown, but very real risk of disruptors utilizing IoT and artificial intelligence to shift business models and markets.

Now is the time to get serious, develop a solid strategy, and take action.

I recently published an industry brief providing more detail on the factors that make today’s market ideal for moving forward with IIoT, in addition to a better understanding of the associated risks. You can download a copy of The Best of Times and The Worst of Times for the Internet of Things by clicking the Button below.